Chart Art: Another Shallow Dip For the Oil Uptrend Ahead?

Random Advertisment

Oil has been on a monster run higher with shallow pullbacks easily drawing in buyers along the way.

Will the consolidation lead to a pullback and another buying opportunity for the bulls?

WTI Crude Oil Futures: 1-hour

WTI Crude Oil Futures 1-hour Forex Chart by TradingView

WTI Crude Oil Futures 1-hour Forex Chart by TradingView

Alright, folks, let’s dive into the wild world of oil prices!

Since the end of August, oil has been on a bit of a rocket ride higher. I guess oil bulls decided it was time to show off and went from $78 a barrel to just shy of $91 per barrel–a 16% move in less than a month! I mean, talk about an overachiever, right?

During this crazy ride, every time there was a teeny-tiny dip, people rushed in to buy. It was like a clearance sale at your favorite store – “Economic data is bottoming out, fresh stimulus in China, get it while it’s hot!”

Now, with the possibility of rate hikes taking a breather, the party might not be over just yet. But the big question is, can the bulls get a better deal?

If you check out the one-hour chart (yes, we’re getting technical here), you’ll see that after oil hit a roadblock at the $91 mark, it took a little dip.

And between $89.50 and $90.00, there’s a whole bunch of technical analysis reasons for buyers to get excited. We’re talking support at a cool $90.00, the 100 SMA doing its thing as a support all September, and a pattern of rising ‘lows’ that’s been as reliable as your morning coffee.

So, if you’re team “Bullish Fundamental,” keep an eye on this zone for signs that the buyers are back in business, and maybe start sketching out your grand plan for managing risk.

Now, for our “Bearish Fundie Playas,” there’s a bit of a squabble between the price going up and the stochastic indicator going down that could draw in some technical bears / counter trend traders, but it might not be enough to break that strong support party. At least not without a major fundamental shake-up.

But, IF (big if) that scenario plays out, and we see a sustained downward slide, brace yourselves for a potential showdown around the $88.00 mark. Here, the 200 SMA may draw in fresh buyers / short profit takers, along with that resistance area that held its ground like a champ at the beginning of September before breaking.

Ultimately, the price will follow the fundies, so be sure to catch up on what’s driving prices this week with the latest “Week Ahead in FX” post!

You May Also Like

About the Author: Webbey Team

[mcrypto id="5677"]